Question
With a $850,000 budget, Company D is evaluating seven projects. Choose the optimal set of projects to maximize NPV. What is the resulting total NPV
With a $850,000 budget, Company D is evaluating seven projects. Choose the optimal set of projects to maximize NPV. What is the resulting total NPV and IRR?
Project | Investment ($000) | NPV ($000) | IRR (%) |
1 | 150 | 30 | 13.5 |
2 | 200 | 50 | 16.0 |
3 | 250 | 60 | 14.0 |
4 | 100 | 15 | 10.5 |
5 | 300 | 70 | 17.0 |
6 | 200 | 35 | 12.5 |
7 | 150 | 25 | 11.0 |
- Select projects within the $850,000 budget.
- Maximize NPV.
- Calculate the portfolio's IRR.
- Determine the total investment.
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Practical Management Science
Authors: Wayne L. Winston, Christian Albright
5th Edition
1305631540, 1305631544, 1305250907, 978-1305250901
